Pages

9/06/2008

BWTL.OB selling at discount to liquidation value??

BWTL.OB dropped Friday and reached a low of .76. It bounced back to .95 to close the day down 17.39%. The contrarian in me couldn’t resist this tiny 4.35 million unknown OTCBB retail stock. Warning 41.7% of the Company’s net sales are derived from the sale of retail gasoline.But with a $2.83 healthy book value that is comprised of cash and real estate.

I purchased shares on Friday with a long term outlook willing to wait for the potential company sale, share buybacks, a going private transaction or the sale of company owned real estate to unlock value. Note shares were available at the .95 close price this Friday 09/05/08.

Lets break down the book value of 2.83 per share. Cash is .87 , current assets 1.77, long term investments of .13, fixed assets 2.37 and this includes real estate at 5 locations. As of January 31, 2008, the Company operated ten travel centers, seven of which are in New Mexico and three of which are in Arizona. The Company owns the real estate and improvements where five of its travel centers are located, all of which are subject to mortgages. Total liabilities are 1.43 per share and cash – current liabilities = .56, retained earnings are .70 per share. Current assets (1.46) - Current Liabilities (.31) =$1.15. A $1.15 NCAV versus a stock price of .95 or lower on Friday is a clear Graham’s NCAV strategy.

P/S is at .16 and is sits at a historical low going back to 2002. Price to book is also at historical low .95(price)/2.83(Book value) = .33